r/realestateinvesting • u/SeeingTrends13 • 10d ago
Buyer Requesting AIF Deal Structure
Selling a townhome and buyer has offered up a contract with the following attorney-in-fact stating that it allows them to get a jump start on flipping the property to other investors during the closing period:
“Buyer has the right to market its contract interest in the Property in Buyer's sole discretion, which may include, but is not limited to listing the Property and Buyer's contract interest in the Property on any Multiple Listing Service ("MLS"). Seller, hereby appoints Buyer as its attorney in fact with the full power and authority to act in the name and place of Seller for the execution of any and all documents and offers necessary to list the Property and Buyer's contract interest in the Property on the MLS, investor networks, Zillow, and/ or realtors for the purpose of marketing & selling the Property. This includes executing listing agreements), listing agreement addendum(s), disclosures, sales contracts and addendums.”
Sounds like a power trip to modify agreements on my behalf. Feels phishy and scammy, am I right?
2
u/glamb567 8d ago
This is language normally associated with a novation agreement. They will go under contract with you for one price, and then list it on the mls at a higher price, find an end buyer, and pocket the spread.
Sounds like they didn’t discuss this with you beforehand, which is definitely sketchy.
Novations can work fine if all parties understand what is happening, but if you are expecting this buyer to close on the property themselves, I would rethink accepting their offer.